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1 50 percent of the interest due on $41,891.
All section references are to the Internal Revenue Code in
effect for the years in issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure, unless otherwise
indicated.
After concessions, the issues remaining for our
consideration are: (1) Whether petitioners are entitled to
depreciation deductions of $154,986 and $207,060 for their 1986
and 1989 taxable years, respectively; (2) whether petitioners are
entitled to other Schedule C deductions for 1986 and 1989;
(3) whether petitioners failed to include income of $163,001 and
$72,817 received during their 1986 and 1989 tax years,
respectively; (4) whether petitioners are liable for self-
employment tax on any part of the $163,001 and $72,817 amounts;
(5) whether petitioners are liable for an addition to tax for
negligence under section 6653(a)(1)(A) and (B) for 1986 and the
accuracy-related penalty under section 6662(a) for 1989; (6)
whether petitioners are liable for the substantial understatement
addition to tax under section 6661 for 1986, and (7) whether
petitioners are liable for the late filing addition to tax under
section 6651(a)(1) for 1986 and 1989.1
1 The notice of deficiency reflects an investment tax credit
carryforward issue involving $98,660 for 1986. Since the time of
the pleadings, the parties have not addressed this issue.
Therefore, for purposes of this case, the investment tax credit
(continued...)
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